New campaign aims to stop banks cashing in during Covid-19 crisis from interest on poor country debt
Date: 9 March 2021
Africa is spending three times more on debt repayments to banks and speculators than it would cost to vaccinate the entire continent against Covid-19.(1)
African governments are expected to pay $23.4 billion in debt repayments to private lenders alone this year.
Many lenders have so far refused to cancel or suspend any of the debts despite calls from world leaders and campaigners.
- ‘Big Banks: Cancel the Debt’ projected onto London banks. For photos see: https://www.flickr.com/photos/wdm/albums/72157718580750723
Anti-poverty organisations have launched a new campaign targeting some of the world’s richest banks for continuing to demand large debt repayments during the pandemic. Many have made a fortune over the last year, profiting during the pandemic, while funds are being drained from some of the poorest countries in the world. Campaigners projected the call to cancel the debt onto the central London offices of lenders including HSBC, BlackRock, UBS and JP Morgan.
Campaigners are claiming that corporate lenders have taken hardly any action, despite calls from developing country governments and even World Bank President David Malpass for private lenders to cancel poor country debts in the pandemic.(2)
Other lenders, including richer countries, have agreed to suspend debts, but lenders such as HSBC, Blackrock, UBS, and JP Morgan have continued to demand debt repayments.(3)
Over 150 million people across the developing world could be pushed into extreme poverty because of Covid-19, and debt relief would go some way to helping poorer countries cope.(4)
Eva Watkinson, Head of Campaigns at Jubilee Debt Campaign said:
“Africa is spending three times more on debt repayments to banks and speculators than it would cost to vaccinate the entire continent against Covid-19. Some companies will make up to 250% profit from these high interest loans if paid back in full.(5) There is no excuse for companies like HSBC, Blackrock, JP Morgan and UBS not to offer debt relief in the middle of a pandemic as government lenders have done.”
Matti Kohonen from Christian Aid said:
“Lower-income countries have asked for debt relief from private lenders and been refused. This is deeply unjust when companies such as Blackrock are making a profit from distressed country debts, while they could afford to provide debt relief as they control assets over twice the size of the GDP of all African countries.(6) Private lenders must accept requests to cancel the debt.”
Dario Kenner, Lead Analyst Sustainable Economic Development at Cafod said:
“59% of all debt payments due in Zambia are owed to banks and speculators, yet when Zambia asked for debt relief they were refused. The UK can and must pass new laws that will force UK-based companies owning large amounts of Zambia’s debt to agree to debt relief and restructuring, so lower-income countries can recover from the pandemic.
Nick Dearden, Director at Global Justice Now, said:
“BlackRock CEO Larry Fink says that Covid-19 and climate change are existential crises that big business must respond to. If he wants to see positive action from the private sector, maybe he should look closer to home and think about cancelling the huge debts owed to Blackrock by governments who have requested debt relief. Without this, more crucial public funds will be diverted away from tackling climate change and supporting healthcare”.
Notes for editors
The campaign is led by Cafod, Christian Aid, Global Justice Now and Jubilee Debt Campaign.
Photos from the projection are available at: https://www.flickr.com/photos/wdm/albums/72157718580750723
- Calculated by Jubilee Debt Campaign. The cost of purchasing required vaccines for African countries is based on an average price from vaccine deals that African countries and institutions have already made (estimated at about $9.63 per person) and based on the population of Africa who will require a vaccine of 776 million, which excludes children aged 0-14 and those expected to be vaccinated under the COVAX scheme.
Photo: Robin Prime/Christian Aid